Launch Funding for Innovative Companies
The Economic Development Partnership’s Launchpad program and a new state Innovation Fund provide startup funding for businesses just getting off the ground.
Round two winners of the 2013 Alabama Launchpad competition were BLOX, Alabama Chai, Heartlife Technology and E-Electricity.
Photos by Gary Tramontina Photography Inc. for Alabama Launchpad
Alabama sees the value in funding innovative and creative companies. The development of these companies, as well as enticing them to stay in the state, creates highly skilled, highly paid jobs for the citizens. Thanks to several programs, these businesses can compete to receive startup capital and other benefits from Launchpad and the Alabama Innovation Fund.
Launchpad was created in 2006 when the Economic Development Partnership of Alabama (EDPA) and six universities — Alabama State University, Alabama A&M University, Auburn University, The University of Alabama, University of Alabama at Birmingham and University of Alabama in Huntsville — met to figure out a way to support entrepreneurship and innovation in Alabama. The goal of the program was to award new businesses with startup capital and help increase the odds of making these businesses successful in Alabama. Launchpad is a public/private partnership, funded through corporate funds, universities and foundations, as well as the state of Alabama through the Alabama Research Alliance grant. The University of South Alabama also has joined the group of university partners.
“Launchpad is intended for high growth, high tech enterprises. Our metric that we are governed by is job creation. We want to support companies that create high skill, high wage jobs,” says Greg Sheek, director of Launchpad.
At first, Launchpad funded the companies that won an annual competition. Universities were major supporters, and companies applying for Launchpad support had to have a university connection. By 2011, the demand was great enough to necessitate expanding the program. Launchpad became a part of the EDPA foundation, allowing for competitions to take place several times per year. At the beginning of 2013, the university affiliation requirement was dropped in order to serve more companies.
“Our numbers are always moving upwards,” says Sheek. “This year we had 22 applicants in round one and 27 in round two. There will be three competitions in 2013 and three are set for 2014, as well.”
To apply for Launchpad funding, the company must be a new or startup business. They also must be based in or operate in Alabama. The money awarded is tied to the company’s request and need. Each scale is completely different. Companies who do not make the final cut are encouraged to reapply. If a team reapplies during the same year, it won’t be charged a second entry fee. The judges also are an important part of the process. Some have actually been through the competition themselves.
“We like for at least one judge to be a Launchpad alumni,” says Sheek.
Companies that have received money from Launchpad in round one of 2013 included Nutripilot, Carbon Nanotube Engineered Surfaces (CNTES) and Exscien Corp. Nutripilot received $38,000 for its smartphone and tablet app to help people maintain healthy lifestyles with proper nutrition. CNTES won $8,000 for its application to grow carbon nanotubes on the surface of engineered materials. The biotechnology firm Exscien Corp. received $54,000. This firm has developed a method for repairing damage to mitochondrial DNA, a method that, if successful, could repair damage from a variety of diseases and improve lung transplants.
Round two of 2013 awarded money to BLOX, Alabama Chai, Heartlife Technology and E-Electricity. BLOX, recipient of $50,000, will help provide quality buildings faster and cheaper by creating buildings in an off-site manufacturing facility and shipping them to their appropriate construction site. Alabama Chai, an organic tea, which will be available in grocery stores and restaurants, received $30,000. Heartlife Technology received $25,000 to develop a way to replace parts for automated external defibrillators with a smartphone app. E-Electricity received $23,500 to develop a method of charging devices wirelessly.
Even those that don’t win the competitions for funding benefit from their involvement in applying to Launchpad. Commercial assessment is purchased for the finalists to help identify their markets.
“Even if you don’t get the money, the assessment is very powerful,” Sheek says.
The application deadline for the last round of 2013 will be December 1. Applications will be accepted for the first round of 2014 beginning May 1.
The Alabama Department of Commerce also wants to support new and creative projects. In 2012, the Alabama Innovation Fund received its first $3.5 million. That first year, 15 projects were selected to receive funding from the 60 applicants. At least six of those 15 were university projects that came out of the Accelerate Alabama program. In 2013, the Innovation Fund did not award any competitive funds to new businesses but earmarked funding for the HudsonAlpha Institute for Biotechnology and HudsonAlpha Institute Science Teacher Training as line items in the budget. 2014 is set to support these projects again, as well as add the Jefferson County Steering Development. However, this leaves $1,595,201 to fund competitive projects.
“We continue to try to help with research of projects that look to the future,” says Linda Swann, assistant secretary of commerce.
The Innovation Fund was the idea of Gov. Robert Bentley, and the money comes from the Education Budget. The projects earmarked for the 2014 fiscal year focus on teaching innovation and creativity. All projects that receive funding from the Innovation Fund go through universities and look for ways to create new things. As part of the Accelerate Alabama Strategic Plan, in the future the Alabama Innovation Fund hopes to support existing industry, develop the information technology sector, foster entrepreneurship and create a statewide organization for innovation. Additional goals include coordinating and increasing commercialization efforts, building research and development capacity, providing financial support for commercialization and developing a legislative agenda for innovation.
“We hope the Legislature continues to see the value in this,” says Swann. “There is always a need for more money.”
Laura Stakelum is a freelance writer for Business Alabama. She lives in Dothan.